Strong branded performance for Ajanta in Q3AJANTPHARM - 1675 Change: -8.40 (-0.50 %)
News: Ajanta's Q3FY22 revenues grew 11.9% YoY to Rs.837.9 crore driven by domestic business growth of 18.2% YoY to Rs.260 crore and Emerging markets (branded) which grew 26.2% YoY to Rs.361 crore. US sales grew 3.1% YoY to Rs.166 crore while Africa tender business was down 53.2% YoY to Rs.36 crore. EBITDA margins declined 369 bps YoY to 28.6% due to higher employee because of marketing activity reaching pre-Covid level, higher freight cost and normalised R&D expenditure. EBITDA de-grew merely ~ 1% YoY to Rs.239.6 crores. PAT grew 8.6% YoY to Rs.191.8 crores. Delta vis-à-vis EBITDA was mainly due to increase in other income, lower interest and tax expense
Views: Ajanta’s domestic business was driven by new launches, market share gain and price increase, while traction in Africa branded business was partially offset by muted performance in Asia due supply chain disruptions. US business witnessed continued pricing pressure and management is looking to launch drugs with better risk-reward matrix. Ajanta is likely to maintain domestic growth momentum leveraging on the already launched products (16 new launches in 9MFY22, 4 being First to Market). On the EBITDA margins front, the management expects to maintain the current rate in FY22. Overall, calculated focus, steady gross margins and lighter balance sheet are some key differentiators for Ajanta.